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The Ultimate Guide to Choosing the Right ERP Platform for Small Businesses

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Organizations with broken systems usually suffer from broken business processes and vice-versa.
– Sam Oshay

The global enterprise resource planning (ERP) software market size will reportedly cross the $90 billion mark by 2026, signaling a massive 9.8% CAGR between now and 2027.  

95% of businesses achieve major improvements post implementing ERP through increased collaboration, reduced process times, and centralized enterprise data. 

An ERP for small businesses acts as a powerhouse. That being said, not many organizations are fully aware of the unbelievable potential of ERP. For years, organizations have been using ERP software to manage their functions within an integrated and centralized system – as it helps them break down the silos by bringing together customer management, human resources, inventory, and finance capabilities into a single system.

While ERP can largely benefit businesses, it isn’t one-size-fits-all. You’ll find some platforms to be well-suited for smaller businesses, whereas others have been specially built for large enterprises. That’s the reason it’s extremely important to familiarize yourself with the different types of ERP platforms available and choose the perfect fit for your business.

To help small businesses make the right decision, we’ve prepared this guide – where we’ll be covering different topics and sub-topics revolving around the top ERP platforms for small businesses to help organizations make the right decision.

Small Business ERP Management Software Complete Buyer’s Guide

Following are the sub-topics we’ll be covering in this highly detailed guide:

  • What Is Small Business ERP Software?
  • Key Features of ERP for Small and Medium-Sized Businesses
  • What Are the Benefits of ERP Solutions?
  • Who Uses Enterprise Resource Planning Systems?
  • Types of ERP Platforms Good for Small Businesses
  • How Much Does an ERP Platform Cost for a Small Business?
  • Which Companies Should Buy ERP Systems?
  • What Are the Best ERP Software for Startups and Small Businesses?
  • How to Select the Best ERP for Good Return on Investment (ROI)
  • Implementation Process of Enterprise Resource Planning Systems

Let’s dive deep into these points, one at a time.

What Is Small Business ERP Software?

Enterprise Resource Planning (ERP) refers to the integration and automation of a company’s core business activities. Small businesses can tap into ERP to plan and manage their daily activities like manufacturing, supply chain, financials, services, and other core activities. At the same time, an ERP platform can be used to simplify and automate activities like project management, accounting, and procurement, risk management, supply chain operations, compliance, and more. Other key business functionalities include marketing, sales, eCommerce, and more. 

ERP has been a game-changing experience for both large corporations and small as well as midsize companies. Some systems are specifically built for large-sized businesses. And whereas others are for small-and-medium-sized ones. 

Small business ERP platforms can help you solve problems like broken and complicated processes and systems, poor reporting and analytics, and more. ERP platforms cover different aspects of business operations, including:

  • Common database
  • Integrated system
  • Common UI across components and apps
  • Support for components and apps
  • Cloud or on-premises and SaaS deployment

That being said, let’s look at the key features of ERP systems for small businesses.

Key Features of ERP for Small and Medium-Sized Businesses

Following are the key features of ERPs for small businesses:

  • Ability to Integrate of Different Processes & Data
  • Automate Repeatable & Time-Consuming Tasks
  • Accurate Reporting & Analytics
  • Standard & Advanced Finance Handling
  • Ability to Deliver an Enhanced Customer Experience
  • Level Up Sales & Marketing Efforts
  • Enhanced Supply Chain Management

Ability to Integrate Different Processes & Data

Data silos often result in missed opportunities, inefficiency, and different departments with different directions. One of the core benefits of ERP is the central focus on critical financial and operational as well as business data that different departments can share throughout the organization in real-time with ease.

ERP ensures data consistency and multiple entries. At the same time, it encourages and helps businesses develop business intelligence by turning data into insights and reports. 

Automate Repeatable & Time-Consuming Tasks

With ERP, businesses can automate repeatable business tasks like order processing, payroll, reporting, billing, and invoicing. At the same time, it helps businesses save time on manual data entry and reduce errors, allowing employees to save their time and focus on other value-adding tasks. 

ERP platforms work such that the data entered by a single user will be available to anyone throughout the organization. Automation in turn results in increased revenue and enhanced customer experience. At the same time, ERP even makes it easier for C-level executives to receive up-to-date and accurate financial reports on cash flow as well as other important metrics. 

Accurate Reporting & Analytics

Accurate reporting and analytics are important for everyone throughout the company. ERP reporting and analytics modules provide insights and statistics on different activities managed using the system. 

This allows stakeholders to make better-informed decisions and identify any potential problems that businesses might face in the near future. Reports provided are in the form of graphs, charts, and dashboards – allowing stakeholders to identify the trends and patterns for better results.  

Standard & Advanced Finance Handling

ERP platforms offer accounting functionalities like creating invoices, preparing general ledger, generating financial statements, budgeting, conducting financial close, processing payments, and more. 

Some advanced platforms offer additional features like multi-entity as well as multi-currency management, fixed assets depreciation and project accounting, tax management, and more. 

Ability to Deliver an Enhanced Customer Experience

Systems with advanced integrated Customer Relationship Management features tap into customer data, allowing businesses to easily access and share customer information like order history, contacts, prospect status, purchase orders, and more. 

Level Up Sales & Marketing Efforts

Again, systems with advanced integrated CRM software features make it much easier for sales and marketing teams to upsell, forecast, track important information such as profit ratio and margins, manage commissions, and more. 

With these features, marketing teams can build and execute conversion-focused lead generation campaigns and track them efficiently. Also, sales and marketing teams can better collaborate with finance as well as operations departments for delivering a great customer experience. 

Enhanced Supply Chain Management

ERP platforms provide information about a company’s SCM by tracking logistics, inventory, demand, distribution, and more. A Fully integrated supply chain will enhance your operations – as it can help you set your inventory goals and simplify the distribution resource planning and lastly, suggest work orders, purchase orders plus transfer orders across different locations. Companies with on-the-spot insights into their SCM can efficiently identify any inefficiency gaps and build better control. 

Now that we have looked into the different features, let’s learn why ERP is a game-changer for business.

What Are the Benefits of ERP Solutions?

With several key features, ERP platforms can streamline and integrate different organizational processes and bring all of them under a single roof. Managers and C-Level executives can thus use it to make better-informed decisions and monitor critical projects.

Some of the well-known benefits of ERP include:

  • Increased Efficiency: As we mentioned before, one of the big advantages of ERP is automation as businesses can automate repeatable manual and routine tasks. This not only results in cost reduction but also frees up employees from having to perform those repeatable tasks again and again. As a result, employees can focus on other crucial activities, resulting in reduced production bottlenecks, responsive and transparent supply chain, better business growth, improved demand forecasting, and more. 
  • Better Collaboration: From connecting different departments to improved collaboration, ERP platforms break down the different silos, allowing people from different departments to collaborate in an efficient manner. Upon implementation, every approved organization member will have on-demand access to the company’s operational data – through which he/she can gain insights into the different operations. Also, real-time data access further results in cost savings and better workflows. 
  • Built-in Compliance: If your business doesn’t maintain regulatory compliance, then you may skip this point. With ERP, businesses can track compliance changes and industry regulations, allowing them to stay in compliance with relevant laws, specifications, and guidelines.
  • Real-Time Data and Enhanced Reporting: ERP allows businesses to collect, store as well as analyze data under one centralized location over multiple numerous ones spread throughout the company. This results in better visibility as it allows executives and employees to act strategically. Centralized data collection and storing enable businesses to access and generate information as well as meaningful reports. 
  • Improved Customer Service: With an ERP platform, different departments can get their hands on customer information. This will result in improved collaboration between different departments and ultimately lead to faster response times, improved order accuracy, and delivery. Also, marketing and sales departments can use this data to build conversion-focused campaigns rather than having to create and maintain different spreadsheets. 

Who Uses Enterprise Resource Planning Systems?

ERP platforms offer numerous benefits, all thanks to their action-packed features. Since one big purpose of ERP platforms is to align different business processes and bring them under a single roof, their features are dedicated to helping different departments, which include:

  • Accounting & Finance
  • Operations
  • Sales
  • Marketing
  • Product Development 
  • Quality Management
  • Purchasing & Procurement

Types of ERP Software Good for Small Businesses

The three different types of ERP platforms for small businesses include:

  • Cloud-Based 
  • Industry-Specific 
  • Open-Source & Free 

Let’s dive deep into each of these types one at a time.

Cloud-Based ERP System for Small Businesses

While ERP platforms are available as on-premise solutions, cloud-based ERP has turned increasingly popular in the last few years, all thanks to their upfront costs as well as lower monthly payments. Cloud ERPs will result in anyone and everyone who’s a part of the organization being able to easily access the system anywhere and anytime – as long as there’s an active internet connection. On-premise implementation requires businesses to spend their top dollars for licensing and effective implementation – which is why most businesses prefer cloud in today’s digital world.

Some of the big benefits of cloud-based ERP include:

  • Lower Operating Costs
  • Superior Security
  • Superior UAT & API Testing
  • Flexibility of Access
  • Easy Scalability
  • Low Entrance Barrier
  • Non-Stop Geographic Accessibility
  • Improved Productivity

Industry-Specific ERP Software for Small Businesses

Different ERP platforms are available for different industries like retail, manufacturing, and distribution. These systems are built such that they cater to different businesses’ unique needs. Depending on the industry you belong to and your business model, it’s really important to explore different options and find the right fit for your business.

Free & Open Source ERP Software for Small Businesses

ERP platforms differ depending on their source code and availability for partners and customers. Free and open-source ERPs allow the users to change their source code and make modifications – depending on their needs and requirements.  Rather than relying on the software vendor, companies can make the customizations themselves. 

How Much Does an ERP System Solution Cost for a Small Business?

The final costs of an ERP platform may vary – depending on the business’s needs and requirements. The cost may be straightforward – if the companies choose to opt for a cloud-based solution. And it may even get complicated for different add-on features, extensions, etc.

The final costs of an ERP are vastly different from its standard cost – that’s because vendors usually combine multiple products and offer incentives like free licenses, services, and more. Some add-on services that may increase the cost include configuration and customization, business process reengineering, and industry-specific consultation charges. 

SMBs should expect to invest anywhere between $75,000 (starting price) and $750,000 throughout the course of ownership. Some of the most common reasons why price range varies include:

  • Additional Modules & Customization
  • Ongoing Maintenance
  • Training & Customer Support
  • Implementation 
  • Deployment
  • Maintenance & Upgrades

Also, some non-monetary costs include time and productivity. While the listed cost may seem cheap, businesses should really focus on the hidden costs. Sometimes, these costs may add up and exceed the standard cost as well. You’ll be shocked to know that the price range varies for large corporations – standing between $1 million to $10 million.

Which Companies Should Buy ERP Systems?

First, it’s important to note that all businesses, whether it’s a startup or large corporation, can benefit from ERP. However, it’s the most beneficial to companies belonging to the manufacturing, distribution as well as professional services industries.

Companies who should tap into ERP include:

  1. Manufacturers: With ERP’s centralized data repository, manufacturers can gain more insights and have better visibility over their operations, costs plus projects. Usually, manufacturers across complex industries like defense and aerospace use multiple ERPs for different types of activities. For example, one purpose may be distribution whereas the other may be manufacturing.
  2. Wholesalers & Distributors: Distributors and wholesalers can use ERP for managing their logistics operations like warehousing, inventory management, shipping, and more. Distribution-specific systems are loaded with these kinds of features. However, if you need additional functionalities like fleet management, transportation, or third-party logistics, you may have to submit your request to ERP vendors.
  3. Professional Services Companies: Businesses across complex industries like engineering, architecture, and construction benefit the most from ERP. Usually, these companies are in dire need of a unified solution that suits their specific needs for project management, marketing, accounting, and more. 

With numerous types of ERPs and various vendors to choose from, SMEs often find themselves confused about the ERP platform that they should be going with. That’s the reason we’ve put together the five top ERP software solutions to choose from. 

What Are the Best ERP Software for Startups & Small Businesses?

Following are the top four ERP software for startups and small businesses:

  • Recurrency 
  • Oracle NetSuite
  • SAP Business One
  • Epicor Prophet 21
  • Odoo ERP

Let’s look at what makes them so special.

Oracle NetSuite

Oracle NetSuite is a full-service solution that offers complete visibility into small business data at an affordable cost and is widely popular for its ease of use. It’s one of the world’s best cloud ERP platforms currently being used by 26,000+ businesses across 200+ countries.

Businesses can automate their core activities and processes over the cloud – all thanks to the utilization of cutting-edge tech while developing this platform. Some of the benefits of Implementing this solution include:

  • Better Decision-Making
  • Single Solution for Business
  • Customizable
  • Scalable
  • Multinational, Multicurrency, Multilingual, Multi-Subsidiary
  • High Data Security
  • Biyearly Upgrades

Additionally, some of the mind-blowing Oracle ERP features include:

  • Accounting Software
  • Financial Management
  • Inventory Management
  • Global Business Management
  • Supply Chain Management
  • Order Management
  • Warehouse Management

SAP Business One

SAP Business One is an all-in-one comprehensive business management system with outstanding capabilities for small and midsized businesses. With this solution, you can streamline your business’s key processes, make better decisions, gain better insights, manage your costs, and have complete control over different aspects of your operations. In a nutshell, it’s the single most affordable solution for managing your complete business. 

The benefits of taping into SAP Business One include:

  • Affordable
  • Greater Financial Visibility
  • Improved SCM
  • Ability to Deliver Outstanding Customer Experience
  • Improved Decision Making
  • End-to-End Business Automation
  • Accurate Real-Time Reporting & Analytics
  • Lower Technology Costs 

Some of its core features include:

  • Financial Management
  • Sales & Customer Management
  • Purchasing & Inventory Control
  • Business Intelligence
  • Analytics & Reporting

Epicor Prophet 21

Epicor Prophet 21 is a cloud-based ERP management platform for distributors, allowing them to improve their efficiency, innovate with insight, and scale with ease. It’s powered by Microsoft Azure – which is the most trusted cloud enterprise software. Epicor Prophet 21 has been specifically built to help distribution businesses break through the noise and continually improve and scale their business operations with its end-to-end web-enabled infrastructure as well as modern technology stack.

Some of the benefits of using Epicor Prophet 21 are:

  • Ability to Boost Customer Relationships 
  • Improve Productivity
  • Ability to Leg Up on the Competition
  • Improve Margin
  • Inventory Management 
  • Accurate Reporting & Analytics

Some of the platform’s core features include:

  • Sales Management
  • Inventory & Supply Chain
  • Warehouse Management
  • Cloud Accounting
  • Business Intelligence
  • Value-Added Services
  • eCommerce
  • Customer Experience

Odoo ERP

Here’s an open-source, fully integrated as well as customizable ERP solution for small businesses – Odoo. This ERP has been loaded with hundreds of professionally designed business applications. The platform’s world-class database has been designed with businesses’ core needs in mind – which include sales, CRM, inventory, accounting, and more. 

Regardless of your company’s size and budget, it’s an all-in-one management solution designed for meeting the needs of businesses. Also, it’s a cost-effective solution.  While it’s open-source software, you can add add-ons for additional costs. Also, if you need integrations, you may end up having to pay extra – but it completely depends on your needs and requirements.

Benefits of Odoo are:

  • Open-Source
  • Extensible Architecture
  • Ability to Customize
  • Comprehensive in Nature
  • Available with No Licensing Costs
  • Easy to Integrate
  • User-Friendly
  • Flexible
  • Responsive

Also, some of its features include:

  • Financing
  • Sales
  • Websites
  • Inventory & MRP
  • Human Resources
  • Marketing
  • Services
  • Productivity

Some of the other popular ERP platforms include:

  • Sage Intacct
  • Microsoft Dynamics GP
  • QuickBooks Desktop Enterprise
  • Acumatica
  • SAP S/4 HANA

How to Select the Best ERP for Good Return on Investment (ROI)

While we have listed down the four best systems you can tap into, how can you select the best one – a right fit for your business that’ll provide you with a good ROI?

Don’t worry, we have listed down the steps for you:

  • Put In Force a Selection Process & Team: It’s time to build a selection process and team. Usually, this team involves an executive sponsor and one of the C-Level executives as well as subject-matter experts from across different departments and locations. Depending on your business’s size and requirements, you may even hire one or more external ERP consultants.
  • Focus on the Budget & Business Needs: ERPs are built for both small, medium, and large businesses. Hence, the first thing you need to consider is the cost – so the first thing you should do is look at both standard and add-on costs as well as other hidden costs like implementation, upgrades, and more. Reach out to different vendors and conduct a negotiation process. By negotiation, we don’t mean just the price-based negotiation, but also the legal as well as contractual terms and service level agreements (SLAs). At the same time, it’s important to focus on your business’ needs and requirements. 
  • Final Purchase: Different people are involved in the decision-making process in an organization. For example, there are C-Level Executives, managers, location heads, and other stakeholders. Hence, it’s really important to create a team that’ll overlook the complete process and coordinate with different stakeholders to turn this process smooth for the complete organization. 

Implementation Process of Enterprise Resource Planning Systems for Small Businesses

Following are a few of the questions companies ask regarding the implementation phase:

  • How are Business ERP Systems Implemented?
  • Who’s Responsible for the Implementation Part?
  • What are the Stages of ERP Implementation?
  • Can You Give Insights into ERP Integration and Other Related Software & Systems?
  • What are the Current Trends of the ERP Solution?

How Are ERP Systems Implemented?

First, you need to choose the ERP platform you’d like to purchase. And once you’re done with ERP software selection, the following are the two main approaches:

  • Big Bang: Here you’ll be completely replacing your legacy systems with your ERP on a fixed date. 
  • Phased: Here, you will be incorporating ERP in a phased-manner rather than going all-in. You may choose to do it department-by-department or location-by-location. That’s dependent on the needs and requirements of the company. First, you may choose to implement the ERP platform for accounting and manufacturing departments. This may be followed by sales, marketing, and the rest. 

Who’s Responsible for ERP Implementation?

While you may implement ERP using internal resources, the ones you select for implementation will eventually depend on the complexity. You may reach out to vendors who may appoint experts to help you with the strategic implementation. At the same time, you may also reach out to external implementation partners to guide you throughout the process. It’s important to have an executive sponsor, who’ll be responsible for:

  • Overseeing the project
  • Approving budget
  • Allocating resources
  • Maintaining vendor-organization relationship

What Are the Stages of ERP Implementation?

The stages of an implementation process include:

  • Data Migration  
  • Setting Up the New System
  • Training
  • Testing
  • Launch or Go-Live Date
  • Post-Sales Support
  • Maintenance & Upgrades

 Insights into ERP Integration and Other Related Software & Systems

Not only do you need to find an ERP that helps you automate your processes and align your business functionalities, but it’s really important to make sure that it scales well as your company grows. For example, at one point in time, you may have to add more users and additional functionalities.

It’s really important to schedule a consultation call with an experienced consultant and think of the long-term scenario. Today, your business may not be receiving thousands of orders. But – if things go right, someday it will. And as you start receiving more orders and as your business grows, you will require a comprehensive system to manage orders, invoices, and inventory. Also, you’ll hire more employees – which means you need to work on employee scheduling, payroll, tax information, benefits, and more.

Luckily, some ERP business solutions allow businesses to add and remove modules based on their requirements. Right now, you may not need some functionalities. But, in the near future, you may. So, what you can do is purchase a standalone system and as your organization grows and the need arises, you can integrate your system with other software and add different modules.

What Are the Current Trends of ERP Solutions?

The global ERP market size will reportedly cross the $86 billion mark by 2026. With an ever-increasing reliance on ERP, it’s really important for businesses to keep themselves updated with the latest trends. Some trends you need to note are:

  • Digital Transformation: Since ERP touches different areas of a company, it makes sense to facilitate the transformation like integrating ERP with IoT devices, advanced analytics, AI adoption – just to name a few.
  • Personalization: With personalization being at the core of building a customer-centric strategy, it’s really important for ERP systems to help businesses conquer their goals with customizable dashboards, chatbots, and more.
  • AI-Powered Insights & Improvements: Artificial intelligence will play a major role in helping businesses level up their processes and operations. 
  • Microservices: This model is being used by vendors for flexible ERP solutions. For instance, you may not need many features like CRM. However, as you scale, there may arise a need for this feature. Microservices allow buyers to implement as well as use module collections in an efficient manner.